With the Government seeing fit to make HM Revenue and Customs a payer of benefits (pension credit etc.) as well as a collector of taxes, it is no wonder that people are becoming confused as to which sources of income are taxable and which are not. It is particularly confusing for pensioners, who receive pensions, annuity income and various sorts of investment income.
Here is a short guide on what income is taxable and what income is not. Whilst it covers the most usual sources of income, it is not a complete list.
There are many other benefits, both means-tested and not means-tested. Some are taxable and some are not. If you receive a benefit and are not sure whether it is taxable or not, consult your local HM Revenue and Customs office.
There are also quite complex rules in some cases (especially as relates to rental income) as to how the taxable amount is calculated, so just knowing that something is or is not taxable is often of little use in knowing what figure to put on the tax return.
If you were an employee before you retired, the tax office dealing with your affairs will often be that which dealt with you as an employee. There is an exception that some pensions schemes (especially those of large employers) are dealt with by specialist units at different tax offices. if you have any doubt as to which tax office you should deal with, your local tax office should be able to advise you if you can supply your full name, date of birth and National insurance number.
Many pensioners do not receive tax returns and therefore have no way of knowing whether they are paying too much or too little in income tax. However, the responsibility for making sure that the tax paid is correct lies completely with the taxpayer under the self-assessment system. If you have any doubts as to whether your tax affairs are correct or not, contact us.